How to Refinance a Car Loan

You may have asked yourself how to refinance a car loan and have been given different answers. It's a good idea to shop around before signing on the dotted line. Several lenders offer a variety of car loan refinancing options, and applying to several of them will not hurt your credit. The Federal Trade Commission also advises consumers to compare offers from as many lenders as possible within a 14-day window. The key to choosing the best auto loan refinance is to focus on the amount of interest you'll pay over the life of the loan, rather than the APR.

It's important to review your existing loan contract carefully to make sure there are no prepayment penalties. You can get this information from the customer service of your current lender. You'll need your vehicle's identification number and proof of employment. If you've made on-time payments on your current car loan, you might be able to refinance it. However, if you have defaulted on your payments, you should not consider this option.

When refinancing a car loan, you'll be required to submit a variety of documents. You'll need information about your existing loan, your monthly payments, and any accrued interest. You'll also need information about your vehicle. This includes its make, model, year, VIN, and registration number. The lender will want to see these details to evaluate its value. Be sure to keep these things in mind as you decide which loan to apply for.